Essays on Costing

Introduction

There are many accounting systems all over the world, which exist in order to help various companies with the management of their businesses. The relative new financial approach is the Activity-Based Costing (ABC). Following Kaplan and Cooper, it is the type of accounting, which helps to solve the financial problems by using different strategies and approaches to each and every separate financial facility on the bases of the consumed materials and information (Kaplan and Cooper). ABC provides proper management of quality for the service industry with mentioning the peculiarities of development and emphasizing activities that conduct the whole businesses. ...

What are the determinants of the Deadweight Loss?

Introduction The deadweight problem happens when the government through an attempt to increase their earnings from the goods in a country increases the taxation on them. It happens when they impose a certain amount of tax on certain commodities in the market and the end consumer as well as the producer in charge of the production process forced to lose the whole or part of their surplus. The loss they both suffer is the deadweight loss. The government has the right to earn some form of income from the trade activities within their borders. However, they also need to ...

Two distinct set of financial reports are used in managing a company, one made by Financial Accountants and the other by Managerial Accountants. These reports are aimed at the company’s external stakeholders such as investors and creditors and are prepared for each quarter and at the end of the financial year and. The format and content of these reports are laid down in laws such as the SOX (Sarbanes- Oxley) Act and in accounting regulations such as the GAAP (Generally Accepted Accounting Principles) and the IFRS (International Financial Reporting Standards). Financial reports become comparable across companies. Managerial accounting ...

Introduction

The term ‘social robot’ has become popular in the modern world and is almost being integrated into the modern day cultural constructs as usual. Lamers & Verbeek (2010) maintain that social technology is meant to invoke emotional attributes and to engage the human mind in a way that exceeds what is physical. Lamers & Verbeek (2010) argue that a robot is man’s effort at recreating his own self and it is with this semblance that the conceptualization of human-robot interaction has been captured. Dating back from the 18th century, inventors and scientists alike have been making numerous attempts at making ...

IT133 – Week 3 Assignment

IT133 – Week 3 Assignment 4B/5B is a block encoding system that breaks up long strings of zeroes and ones but does not increase the frequency bandwidth by breaking them up in four-bit sequence. Table 1 shows each block of four bits replaced by a block of five bits. Due to this, there cannot be more than one leading zero and two trailing zeros. This means that the resulting bit stream has no more than three consecutive zeros (Figure 1). This bit stream is transmitted using non-return to zero inverted (NRZI) method and is used in 100BaseTX (Fast Ethernet) networks ...

Report on Sierra Ltd.

Report on Sierra Ltd.

Introduction

This report will assess the dip in profit of the Sierra Ltd. and will closely monitor the current costing and pricing strategies. It will also assess whether the activity based costing is suitable for the company or not. On further, if activity based costing is implemented, the steps that should be taken by the management to ensure the implementation will also be analyzed. Mr. Kaur’s suggestions will be deeply assessed to ensure if going along his way is safe and profitable. The important concerns of the Sierra Ltd. are due to the refinancing to ...

Introduction

Sierra Ltd. is an automotive parts’ manufacturer situated in Eastbourne, England. The company manufacturers several distinct products and follows the traditional cost management system. It uses machine hours as the basis of allocation of overheads to its product costs. This report provides an assessment of Sierra’s finance director’s proposal to adopt the Activity Based Costing system for allocating overhead costs more appropriately and to increase sales margins. The most important issues faced by Sierra Ltd. are the declining revenue and profits since the last five years, low projected net profits for 2016 and high product costs. Sierra ...

Alpha Group

Consolidated financial statement of financial position for the year ended 31st December, 2015. Items £ (000) £ (000) Long-assets 2014 2015 Investment property, fair value 2500 2500 Property, plant, $ equipment 4324 4818 Total long-term assets 6824 7318 Current assets Cash 200 140 Cash equivalent 30 20 Trade receivables 1900 1200 Inventory 1000 1950 Dividends 100 190 Non-controlling interest share 120 150 Inventory, fair value cost to complete and sell 180 150 Total current assets 3530 3800 Total assets 10354 11118 Equity and liabilities Share capital 1500 1250 Retained earnings 1910 1000 Profits for the year 1000 1250 Dividends payables 100 190 ...

Product and Cost Allocation

“Luggage R Us” is a new luggage company that helps customers design, make and ship their own personalized travel luggage. The company offers four standard luggage sizes that can be used by individuals for business trips, couples on a romantic vacation, and even for a family of four. The four sizes are segregated into the carry-on, medium, large, and the extra-large (Samsonite, 2016). The standard size used for the carry-on is at 22”x14.5”x9.75”, which is within the maximum size limit for baggage for most airline companies (Samsonite, 2016). Figure 1. Luggage sizes offered However, most carry-on luggage ...

Value Chain

The objective of analyzing Monster’s value chain is to make a product that will become popular to its customers, which includes not only the production segment but also marketing and distribution (Horngren and Data, 2015). This is because products will eventually need to be discontinued due to changing customer preferences and product innovation from competitors. This means that the company’s core operations and its products must continuously evolve and this could be done using the value chain analysis tool. For an energy drink company like Monster, one of its main goals is to continuously adapt to the ...

MANAGEMENT ACCOUNTING

Introduction Management and financial accounting provide platforms for an organization management to provide informed decision and policies. Organization management uses the budget as the accounting tool in formulation of policies and allocation of resources in different activities. Accounting encompasses the entire body of knowledge that deals with recording and keeping of all financial transactions. It entails identification, recording, classification, verification, and communication of financial information relating to the resources of the organization. On the other hand, financial accounting is a subset of accounting and is concerned with the use of financial data to measure economic performance of the organization. ...

Costing is the process of tracing and allocating costs to a product, service, or a cost center (Drury, 2008). The cost of a product consists of both direct costs and a fair share of overheads. There are number of costing techniques that Monster Beverage can use that include process costing, job costing, absorption costing, and activity based costing (ABC). Process costing assigns costs to products as the move through various stages or processes (Drury, 2008). In process costing, costs for each process are accumulated over a period such as a month and then the average cost is allocated to ...

A business company always has maximizing of profits on top of its priorities; utilizing minimal resources, operating at minimal costs and increasing the returns. According to Trench (2001), target costing is a business accounting approach where a set desired profit margin subtracts from a competitive price in the market; while the quality and functionality of this particular product maintain, the company ensures achievement of the profit you want at the end of the period. A target cost is, therefore, the maximum cost that a company can incur as expenses in the production of a product but still maintain the ...

MANAGEMENT ACCOUNTING

Introduction Management and financial accounting provide platforms for an organization management to provide informed decision and policies. Organization management uses the budget as the accounting tool in formulation and allocation of resources in different organization activities. The managers are the custodian of the budgets under the management and financial accounting. Financial statement and records provide viable financial data that helps in organization management especially in decision-making. Therefore, the study focuses on the management and financial accounting and expounding on objectives of the budget in an organization. The study will also provide the need of using variance analysis in organization ...

Abstract

In 2009, the US government slashed Medicare reimbursements pushing over two-thirds of health care providers into losses. Medicare reimbursements are expected to increase in the future albeit more slowly than the rise in the cost of providing quality health care. The challenge for BSA is to be able to align its costs in a way that they are able to deliver quality health care at a much lower cost. The key is to measure both the cost and the outcomes of the health care. There is need to establish an accurate system of measuring costs, as well as to ...

The airline industry is considered to be highly competitive and therefore airline company managers will need to determine the relevance of their current ERP systems with regards to the applicability of the financial information it generates. This is because the same quantitative and qualitative information is used for both financial and management accounting. However, the main goal of a company is to generate better profitability for its owners while remaining sustainable. This is done by controlling costs while improving revenues through the use of budgets and the standardization of costs and results to variances, which are primarily under management ...

1.0 Chapter 1 Introduction 1.1 Background and Rationale of the Research The industry of construction is not only a key player in the national economic growth; but also a crucial sector affecting the economic and social welfare of citizenry, particularly in its primary function in providing reliable and decent shelter. It is viewed as one of the most essential sector to highly contribute to the growth of an entire economy at the provincial, national and international levels (Artto & Kujala, 2008). In the recent years, cost modelling and estimation for construction projects have attracted major attention of several research scholars. ...

Our company is a leading designer and manufacturer of water and wastewater treatment systems. We provide systems designed as per client’s requirements, and statutory treated effluent standards. Most of our projects thus involve detailed engineering drawings of various physical tanks, and mechanical parts such as clarifier rotating arms, air floatation systems, pumps, piping, control panels etc. Appropriate process flow diagrams and layouts are thus essential part of proposals and quotations. Thus, it is essential that we prepare our plant diagrams with respect to ASME Y14 standards. The ASME Y14 are standard codes developed by the American Society of ...

Dawn Spray-On!

Choose the Target Market for Your Product, and Describe Your Target Market in Detail The product’s target market is everyone considering that we are all involved in cleaning up at one point in the course of the day. However, we will split the ‘everyone’ into categories depending on how they use the product. The first target market is the working class women who are between the age of 24 and 40. This group is targeted due to their awareness of beauty and therefore the need to maintain a good looking skin. No woman wants to do a clean-up ...

Cost accounting systems are meant for the purposes of measuring, recording and reporting individual product costs. The usefulness of each accounting system is ideal for unique situations and types of work.

Job order costing

This system of costing is usually founded on the main objective of computing the total cost of a specific job. It gives the total costs incurred to complete a job order not costs incurred over a period. The method is useful where the cost of each job is different from the costs of another job and has to be calculated and evaluated on its own. (Hansen & Mowen, 2000). ...

HEALTH CARE SPENDING

(Research Paper) The rising cost of health care has affected almost every section of society of the United States. One section which has been adversely affected in the name of Obamacare act is the medical fraternity is itself. The expenses of providing health care to all the segments have outweighed the incoming financial assets. The only way to reduce the expenditure of providing healthcare is by cutting the cost on the inputs or of the assets which are utilized for providing the optimum level of care. However, doing this may mean compromising with the quality of care. Different researchers ...

Nike cross fit shoes

Nike marketing department is planning to launch a new line named Cross fit shoes. It is essential to identify the target segment in order to form a strategy for marketing and to constitute positioning analysis. Nike trademark is famous brand among youth and adults who keen on sport. The brand disposes of different lines for specific purposes, such as shoes for running, basketball, training, casual etc. This time, Nike is aimed at creating Cross fit shoes line that will be suitable for heavy training, including weightlifting, aerobic exercise, and calisthenics. The target segment for Cross fit shoes are men ...

Part 1

Milton manufacturing is facing a number of issues that include: Inaccurate costing of tables and chairs, there is an equal allocation of overheads to chairs and tables resulting in the chairs being allocated more than a fair share of the overheads while the tables under absorb overheads. Resistance to change, Mr. Smith is reluctant to change the costing techniques arguing that they have traditionally allocated overheads to tables and chairs equally. The organization has a closed climate where employees are not able to freely communicate. For instance, Mr. Smith tends to dominate the meeting and members are afraid of ...

Computing for the overhead costs per unit revealed that the ABC system resulted in a more accurate application of overhead costs for the three products. The existing overhead system uses the direct labour hour as its basis for the overhead rate, which was at $20. The overhead costs per unit was seen to be lower for the Dance, Run and Walk product line when compared to the ABC system. The advantage of the existing overhead system is that it is easy to compute since it is based on a standardized labour hour or machine hour rate. However when the ...

Introduction

As the business world of today is highly influenced and driven by globalization pressures, it is imperative that organizations should manage their financial and non-financial resources efficiently and effectively for gaining competitive edge in their respective marketplaces. Equally important is that organizations, particularly manufacturing businesses, should consume their resources and activities wisely so that the costs should be controlled and revenue could be generated. Therefore, the primary focus of this research is to make an important discussion about Activity-Based Costing (ABC) considering different dimensions. Not only is the concept of Activity-Based Costing (ABC) illustrated based on literature review (gained ...

Activity Based Costing and Process Costing

Contribution margin per unit: Formula = selling price per haircut – total variable cost per haircut Selling price per haircut = $12 Variable cost per haircut = $0.40 Contribution margin per haircut = $12 - $0.40 = $11.60 per haircut

Discussion:

The contribution per unit is $11.60 per haircut, which means that the every haircut is $11.60 towards the profits of the business. Moreover, the portion of fixed cost is very high as compared to the variable costs.

Annual breakeven point in terms of haircuts:

Breakeven point formula = Total fixed cost for the year / Contribution per haircut Labor cost per year = 5 barbers x 40 hours x50 weeks x $9.90 = $99,000 ...

Business Plan: Footwear Company

The report is targeted towards venture investors and with the intend to discuss the bright potential in footwear industry, both casual and athletic, and why are the consumers giving preference for exclusivity and comfort at the time of their purchase.While the core objective of this report is to illustrate the financial opportunities from investing in footwear manufacturing venture, it is also important to project the current as well as future projections and purchase trends likely to prevail in the industry, and why we think that this whole idea will churn significant profits for them.

Why to invest in footwear industry?

Footwear industry has always been ...

(Using Teejay's International based in Houston, Texas)

Introduction

One of the key challenges that management accountant have faced is allocating overheads costs to the products. In overcoming an attempt to address this challenge, various ways have been devised. One of the most instrumental developments in the allocation of overhead is the development of ABC accounting. ABC costing is an improvement to the traditional accounting approach that has always been in use. The method appreciates that there are numerous costs drivers hence identities these cost drivers and uses them to pool costs in order to allocate them to the products (Bendrey, ...

Answer 1)

Casually cited as ‘Nueroscientist’,Marin Lindstorm,is a well known brand expert around the world and is largely renowned for his ideas on neuro-marketing and how the companies can take the benefit from the tendency of the consumers to follow impulse buying. His most famous work, Buyology, where he analyzed more than 2000 people to buy in the world filled up with clutter crisis, and what role does human psyche and subconscious mind in inducing the buyer to buy the product, the ideas perfectly supplemented the content of the article ‘‘In Search of Buy Button’’. As we read in ...

In the current century, the accounting and finance field have witnessed increased efforts to converge accounting standards to globally accepted universal standards. The fact owes to the dire need of increasing comparability of the financial statements of different firms in the various countries. Undoubtedly, there exist key areas of departure in different accounting standards applied in different countries. Of more interest, is the difference that exists between the two dominant accounting systems used by various corporations around the globe. That is the U.S. Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). It is, however, worth ...

Process costing is a system used by manufacturing businesses to determine the cost of their products in an operation that produces large quantities of the same product. The management can determine which section of the operation is making the business incur huge production losses that may affect the final selling price of the product. Chewing gum production at Wrigley is a type of business that employs the process costing method (Anderson, 2009). Right from the mixing of the chewing gum ingredients at the mixing section to the sheeting of the gum loaves into pellets the process is monitored and ...

Organizations adopt various strategies to thrive in the ever competitive business world. The primary objective of firms is making profits; hence, measures should be taken to ensure the enterprises achieve that goal. One of the tactics that Apple Ltd has employed to ensure profitability in the firm is price discrimination in their products. In this article price discrimination will be discussed, and the products that will be considered are Apple Watch Sport, Apple stainless steel watch, and Apple Watch Edition, which are the smart watches the firm has introduced in the market. Price discrimination refers to a pricing policy ...

1.Costing is a very important part of accounting. It involves the basic financial data which will help in price fixing as well as in profit marking. There are many aspects to costing and each one is relevant depending on the product or service provided by the owner. Relevant costing is an important aspect in costing and accounting decisions. A relevant cost is the cost which is specific to a management decision. This generates only the information which is necessary for decision making and removes the unnecessary extraneous information. Relevant cost is only specific and limited to a particular decision ...

Introduction

This paper explores the costing and pricing methods applicable to firms in the tourism and travel sector using Allegiant Travel Company as an example. Allegiant Travel Company is an American company providing leisure travel products and services to under-served cities in the US. It provides air transport, air transport-related products, travel protection products, hotel rooms and other third party travel products. The paper also analyses the financial statements to assess its financial state.

Costing methods

Several costing methods can be applied in the tourism industry depending on the nature of the assignment and the operations of the organization. Applicable costing methods ...

Net Present Value

The Net Present Value is used in estimating the potential value of every project by applying the discounted cash flow valuation that requires an estimation of the size and time of all cash flows that increases from the project (Ehrhardt & Brigham, 2016). However, NPV is affected greatly by the discounting rate. Therefore, making a selection on the proper rate that is sometimes known as the hurdle rate is essential during decision making. Moreover, this should make a reflection on the riskiness of the investment because it is typically measured by the unpredictability of cash flows. Therefore, it must take ...

Communication & Soft Skills

Dear Jerry: Thanks for the trust you have put in me and asked me to lead this project. This project is undoubtedly one of its kind in the division and would go on to serve the business well immediately and in the future. Definitely this project had hiccups right from the start – the first possible one was the unfortunate exit of Mark. Well, we accept that as a personal career choice. Having accepted that, I have spent time in understanding the overall project since having taken over the project as per your directives. I have arrived at two remarkable ...

INTRODUCTION

The electric car was introduced to the market over a hundred years ago. The car used a battery to power most of its applications during operation. There are two varieties of the electric vehicle in the market. First, the hybrid electric vehicle (HEV) has a battery and a system of the electric drive but has no capacity to plug in. The second type is a plug-in hybrid vehicle (PHEV) which obtains its energy from liquid fuel or the battery and has a plugin. Over the years, the performance capacities of these cars have been improved up to 300 hp ...

Introduction

Supply chain efficiency measurement plays an imperative role in enabling organizations take corrective efforts in case of persistent issues in the supply chain. The measurement techniques look for ways through which suppliers, stores personnel, manufactures and marketers could come together to improve ways through which quality products are produced and supplied to the right customers, at the right time and the preferred locations. The supply chain framework includes significant processes such as how to plan, source for the raw materials, produce and then deliver to the targeted customers. This implies that it is only through effective management of the ...

The report will be based on the article, "iPhone 7 release date, news and rumours", by John McCann which was published in techradar.com, on 21st March 2016, http://www.in.techradar.com/news/phone-and-communications/mobile-phones/iPhone-7-release-date-news-and-rumors/articleshow/48900392.cms. This article is about the Apple's new release iPhone7, which deals with the features and comparisons of iPhone7 with the earlier versions, and how it will be better than those versions. The article tells about the release date of the phone, its features, design, comparison with the rivals and costing. The article says almost everything about Apple's iPhone7. In this article, the author has mentioned almost all the details associated with ...

Situational Analysis: The issue with the situation at Terracog appears to stem from a lack of communication between team members since everyone is attempting to push their own agenda to the forefront. The situation emerged with the introduction of BirdsI, a handheld GPS device, introduced by Terracog’s competitor named Posthaste. When customer’s used the product and realized its salient features, the sales team headed by Ed Pryor started pressing for development of a similar product (something which the design team was not very sure of). The initial meeting consisted of Fiero, Pryor and Allen Roth – Director of ...